Canadian Wireless Carriers Have the Highest Margins Worldwide [Report]

More choice, lower prices, and better service are the keywords we’ve heard plenty of times from the Canadian government in relation to the country’s wireless policy. The above keywords are clear enough for us to understand, and it’s easy enough for us to compare the promises to the results of the actions the government has taken over the years.

Industry Canada has proudly highlighted the findings published in Wall Communications’ report on the telecommunications market in Canada: The wireless policy has worked, and Canadians can now enjoy 22% lower wireless prices compared to 2008. Interestingly, though, Canadians still pay the highest wireless bills in the world, and the Bank of America Merrill Lynch Global Wireless Matrix confirms this after analyzing data from Q1 of 2015.

Alphabeatic’s Peter Nowak took out only three tables from the report highlighting the current state of the Canadian wireless market. As you can see from the tables inserted below, Canadian carriers make the most from their customers: an average of $46.58 ARPU (average revenue per user), the highest among all countries compared in the Bank of America study. That’s four times the ARPU carriers in Portugal and Greece make out of their subscribers.

wireless-stats-1Q15

The other two tables look into carrier profitability and service revenue growth. Canada ranks second in both, so carriers have no reason to complain: The typical Canadian wireless bill is up 5.6%. Now compare that to the developed world’s average of 0.5%.

Now, it’s time to look back and compare that to the promises we heard.

Technology enthusiast, rocker, biker and writer of iPhoneinCanada.ca. Follow me on Twitter or contact me via email: istvan@iphoneincanada.ca

  • Jay

    And yet we are completely overlooked by apple when it comes to apple pay -_-

  • The only reason those number droppe is because of services like Wind Mobile. Also the ability to reduce the bill be 20+tax which would hit around that 22% mark. Carrier billing is still at an all time high, now you just have to buy your own phone to get the savings… So it really saving?

  • It’s Me

    Blame the banks. The large Canadian banks formed a negotiating team so as to present a single point for talks. This serves to prevent any one bank from actually dealing with Apple and signing a deal, which would be the catalyst for the other banks from having to do the same. As long as the stay united, they can just keep saying no to Apple and keep mobile payments out of Canada (those they don’t control that is).

  • FragilityG4

    Stick it to the banks … Pay in cash!

  • BigCat

    We may always have this issue in Canada. Look at how big the country is and how small the population is. So, now you have two choices: Have companies like cellular carriers and airlines essentially run by the government (eg. like hospitals & electric companies). Or really open things up and truly allow US companies access to Canadian markets.

    Either way there is not going to be any big changes in the near future. Too bad, I guess this is part of the price for being Canadian.

  • Joe

    If that were true, why would the carriers be making record profits? No, the truth is that these companies are full of overpaid middle-management and operate like an inefficient bureaucracy. Plus, the “Big 3” may as well be called the “Big 1” since they fix their prices and match each other every step of the way.

    We need to help grow Wind into a viable competitor so that they can give these incumbents a run for their money. Look at the special prices in Quebec and Manitoba (where they are trying to compete with Videotron and MTS, respectively) and you’ll see that the Big 3 can easily afford to offer Canadians better prices. The only reason they don’t do it in other provinces is because they have a monopoly.

  • BigCat

    I completely agree with everything you said. Other then if the efficiencies were all fixed these gains would probably just be passed onto the share holders in the form of profit.

    I am sure that MTS or Videotron would just love to actively compete in say the British Columbia market. That would probably take a lot cash in return for the gains made. But then again if British Columbia had a rate base of 20 million cellular users it would probably be worth it. Small markets often suffer from monopolies.

    In Canada it’s not just cellular plans. It’s home insurance, air travel, countless other consumer goods.

  • 1His_Nibs1

    Move along folks…..nothing to see here. Same old, same old, as it were.

  • raslucas

    Those revenue dollars are in US dollars, imagine what it would have been last year when the dollar was at par… ( Or whenever that was, you all know what I mean )

  • QueBall

    I like how Portugal is the cheapest AND making the highest profit margin.

    I think that can only mean the carriers in that country no longer invest much in any network upgrades.

    Would like to know what their infrastructure spending per user is. That is likely a secret nobody wants to share but would reveal a great deal about the differences.

  • Goran Mihajlovi?

    Portugal has 10.5 million people on 92000 sq km. Its capital alone has 25% of Portugal’s population. It doesn’t take THAT much to operate a network in Portugal. There’s net emigration happening due to the recession so there’s not much capacity growth needed. There has been greater than 90% LTE penetration in Portugal for quite some time now. 450mbps LTE-A is being trialed as well.

  • Goran Mihajlovi?

    Sure. Until you take into account that over 90% of the population lives within 200km of the Canadian-American border. Or until you look at areas like southern Ontario, where there’s 12 million people in an area of 100 000sqkm. Or southern Quebec. Our Big 3 boast covering 97+% of the POPULATION not the land. Look at their coverage maps and you can likely estimate something on the order of 1.2-1.3 million sqkm of actual service provided. And most have roaming agreements with MTS so they don’t have to bother with their own networks outside of Winnipeg-maybe Brandon. That brings the national average population density to about a quarter that of say, France. Or in Southern Ontario with a third of the population, on par with most European nations.

    We might have a “small” population, but it is 35 million and growing with a 1.6 trillion dollar economy. We are not THAT small a market. We are highly developed economically and countries a third of our population (example Sweden with companies like Volvo, SAAB military side, Ericsson, H&M, Ikea, AstraZeneca, Vattenfall et al) have successful major industries that compete on the world market in several sectors. There’s no good reason that we also cannot. Certainly not for being “small.”

  • Widohmaker

    Canadian banks are no different from the wireless carriers they are a government protected oligopoly.

  • dsfsdfa

    the profit measured is ebitda. this does not include depreciation / ammortized capital investment

  • chikaraginger

    You realize that if that were true ( overpaid middle-management ) that the profits should be lower. Profits are calculated AFTER expenses ( including salaries ) are tallied. Fat middle-management lowers profitability. I’m not saying this doesn’t exist, but this isn’t a reason for higher profits.

    The reality is… that the Big three have duped Canadians into thinking it’s expensive to service the HUGE country of Canada with cellular service. The reality? Canada has a HIGHER urban population ( More than 80% live in cities ) than the USA and it’s mostly concentrated into 4–5 cities. The cost to service these cities is relatively low.

    Contrary to popular belief, cellular coverage isn’t expensive to built out to service the majority. The US, with its competitive landscape, varied population and numerous middle-sized cities is MUCH more expensive to build infrastructure for.